UBISOFT Reports First Half 2017-18 Sales & Earnings Figures

UBISOFT Reports First Half 2017-18 Sales & Earnings Figures

Group’s outperformance once again buoyed by its strategy of extending game experiences  

and by new high-quality offerings

H1 2017-18: TARGET EXCEEDED, with a strong increase in sales and a sharp positive swing in operating income

  • First-half sales up 65.7% to €466.2 million
    • Second-quarter sales: €264.2 million, versus a target of approximately €190.0 million
  • Growth driven by Mario + Rabbids®: Kingdom Battle, Tom Clancy’s Rainbow Six® Siege, Tom Clancy’s Ghost Recon® Wildlands and For Honor®
  • Digital revenue up 69.1% to €342.6 million
    • Very sharp rise in PRI[1]: up 82.9% to €174.5 million
  • Back-catalog sales up 47.9% to €379.4 million
    • Confirmation of the increasingly recurring profile of the Group’s business
  • Non-IFRS operating income of €3.1 million, a significant positive swing compared with the €61.8 million non-IFRS operating loss recorded for first-half 2016-17
  • Improvement in non-IFRS cash flows from operations, representing a net outflow of €83.6 million versus €180.2 million in first-half 2016-17

ASSASSIN’S CREED® ORIGINS SALES UP 100%[2]

TARGETS[3] FOR FULL-YEAR 2017-18 and 2018-19 CONFIRMED

 

PARIS – Ubisoft released its sales and earnings figures for the six months ending on September 30, 2017 (first-half 2017-18).

Yves Guillemot, Co-Founder and Chief Executive Officer, stated: “We continue to offer players outstanding game experiences with unrivalled variety – ranging from Mario + Rabbids: Kingdom Battle to Assassin’s Creed Origins, and including South Park: The Fractured but Whole. In addition to these new releases, players are engaging with a large amount of additional high-quality content which provides them with longer-term entertainment. This includes Blood Orchid, the recent major update to Tom Clancy’s Rainbow Six Siege, and Ghost War, the highly-acclaimed PvP mode for Tom Clancy’s Ghost Recon Wildlands. And it doesn’t stop there: in the coming weeks we will notably release Resistance, a massive free update to Tom Clancy’s The Division, and South Park: Phone Destroyer, a free-to-play mobile game. Our commitment to providing high-quality game experiences and supporting them for the long term is driven by the importance we place on our player communities. This winning content strategy drove a 66% surge in our sales for the first half of 2017-18 – largely exceeding our targets – as well as a sharp increase in our earnings.”

 

Guillemot concluded, “The quality of our new releases is the result of our effort to transform our model and make our business more profitable and recurring. Given longer development lead times, our talents can fully express their creative visions and therefore maximize the potential of our games. The success of these releases – notably the 100%2 sales growth for Assassin’s Creed Origins – combined with solid live operations demonstrate that Ubisoft is ideally positioned to deliver further growth in future fiscal years, both in terms of financial performance and shareholder value.”

Note

Unless stated otherwise, all of the figures in this press release correspond to non-IFRS data, which is adjusted to exclude non-operating items (as defined in section 2.5.1. of the Fiscal 2017 Registration Document). The Group presents these indicators – which are not prepared strictly in accordance with IFRS – as it considers that they are the best reflection of its operating and financial performance. A reconciliation table between the IFRS consolidated income statement and the non-IFRS consolidated income statement for first-half 2017-18 are provided in an appendix to this press release.

Income statement and key financial data

In € millions

H1 2017-18

%

H1 2016-17

%

Sales

466.2

281.4

Gross margin

390.1

83.7%

226.4

80.5%

Non-IFRS R&D expenses

(186.5)

-40.0%

(123.8)

-44.0%

        Non-IFRS Selling expenses

(138.6)

-29.7%

(113.4)

-40.3%

        Non-IFRS G&A expenses

(61.9)

-13.3%

(51.0)

-18.1%

Total non-IFRS SG&A expenses

(200.5)

-43.0%

(164.4)

-58.4%

Non-IFRS operating income/(loss)

3.1

0.7%

(61.8)

-22.0%

IFRS operating income/(loss)

(34.4)

(90.3)

Non-IFRS diluted EPS (in €)

0.16

(0.32)

IFRS diluted EPS (in €)

(0.19)

(0.59)

Non-IFRS cash flows from operating activities*

(81.4)

9.2

R&D investment expenditure**

(322.8)

(286.7)

Net cash/(debt) position

(186.2)

37.7

* Based on the consolidated cash flow statement for comparison with other industry players (not reviewed)
** Including royalties but excluding future commitments

Sales

Sales for the first half of 2017-18 came to €466.2 million, up 65.7% (or 67.4% at constant exchange rates) compared with the €281.4 million recorded for first-half 2016-17.

Sales in the second quarter of 2017-18 totaled €264.2 million versus €142.2 million in the corresponding prior-year period, representing an increase of 85.8% (or 88.6% at constant exchange rates). This second-quarter showing is higher than the target of approximately €190.0 million issued when Ubisoft released its sales figures for the first quarter of 2017-18.

Main income statement items

Gross margin rose to 83.7% of sales and €390.1 million in absolute value terms (compared with 80.5% and €226.4 million in the first six months of 2016-17).

Ubisoft ended the first half of 2017-18 with non-IFRS operating income of €3.1 million versus a non-IFRS operating loss of €61.8 million in first-half 2016-17. This positive year-on-year swing reflects the following:

  • A €163.7 million increase in gross margin.
  • A €62.7 million rise in R&D expenses to €186.5 million (40.0% of sales) from €123.8 million (44.0%) in first-half 2016-17.
  • A €36.1 million increase in SG&A expenses to €200.5 million (43.0% of sales) from €164.4 million (58.4%) in the first six months of 2016-17:
  • Variable marketing expenses amounted to €87.9 million (18.9% of sales) compared with €71.7 million (25.5%) in first-half 2016-17.
  • Structure costs totaled €112.6 million (24.1% of sales) versus €92.7 million (32.9%) in first-half 2016-17.

Ubisoft reported non-IFRS net income of €19.4 million for the first half of 2017-18, representing non-IFRS diluted earnings per share of €0.16, compared with a non-IFRS net loss of €35.9 million for first-half 2016-17, representing a non-IFRS diluted loss per share of €0.32.

For the full report go here: https://www.ubisoft.com/en-US/company/investor_center/earnings_sales.aspx

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